How to Start Your Own Movie Theater

Wednesday, July 10, 2013

How to Start Your Own Movie Theater

Everyone enjoys a good movie. But consumers' definition of "good," and their willingness to pay for it, are up in the air. That can make the prospect of starting your own movie theater daunting. For film buffs looking to own a cinema, plenty of considerations have to be taken into account and the decision made to not only start a movie theater, but also start one that is popular and profitable.

Step 1

Consider the benefits of franchising versus owning your own theater. Many prospective theater owners franchise a theater from a large company such as AMC or United Artists. Owning your own theater gives you far more control over your business and a bigger share of the profits, but requires a lot of start-up capital.

Step 2

Shop around when franchising. Each theater company that franchises to prospective theater owners has a different set of rules governing the theater's operations, including how much money is paid to the company, what films are shown and advertising issues. Once you've picked a parent company, grab your checkbook and give them a call.

Step 3

Decide on a theme for your theater if you want to go the independent route. Unless you hit upon an area without a movie theater, you are going to need an identity that sets your theater apart from the multiplexes and other independents in the area. Themes for your theater include showing only foreign and independent films, showing mostly classic films, or screening blockbusters long after their release dates at budget prices.

Step 4

Secure sources of distribution if you go the independent route. Remember that one of the big advantages of franchising is that the parent company secures the screening rights to films. As an independent, you will have to secure those rights yourself. This step is essential before you break ground on your theater; without films to screen, your theater becomes just another building.

Step 5

Evaluate the local market before you jump in. You will have to do some extensive research on local film preferences, desires and dislikes. Then you need to determine if you can deliver those films to a regular audience, while still making money. If you strike upon a profitable business model, then it's time to buy property in your desired area and begin the permit process with your local government.

Step 6

Obtain a theater license. Most cities or municipalities have a licensing office that handles business licenses. These license offices will require you to present documents and the address of your business. For instance, to obtain a license in Pittsburgh, Pennsylvania, theater owners need to present identification and the address of the business being licensed to the City Licensing and Permits Office.

Step 7

Secure funding. Owning a movie theater is like owning any other independent business: The most prevalent source of funding is a bank loan. For that, you are going to need to prove to a loan officer that your business is profitable, sustainable and that your credit can handle the loan obligations.

Step 8

Advertise and attract customers. Even if you secure permits and funding, your theater is going to tank if no one knows about it. Those who franchise may be required to run certain advertising campaigns as part of the their franchising agreement, but generating word of mouth is far easier with a parent company behind you. Run opening night promotions, film festivals and daily deals when you open your independent theater to bring in an audience. Make sure your name is everywhere in the weeks and months leading up to the first screening. Connect with business owners in the surrounding area to see if you can run joint promotions with their cafes, bars or restaurants.

References (3)

About the Author

Michael Batton Kaput began writing professionally in 2009. He is an editor at two magazines and a freelance writer. He has been published in "Egypt Today," Egypt's leading current affairs magazine, and "Business Today Egypt," Egypt's number one English-language business magazine. He attended Denison University where he earned a degree in political science and English literature.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Wednesday, July 10, 2013